Chinese automaker BYD is considering Germany as the site for a possible third assembly plant in Europe, a source familiar with the matter told Reuters, as the company seeks to expand its presence in the region and navigate EU import tariffs on China-made electric vehicles (EVs).
BYD, which is already constructing plants in Hungary and Turkey, is evaluating Western Europe for its next facility to strengthen brand recognition and establish itself as a local manufacturer. Germany has emerged as a leading option, though concerns over high labor and energy costs, as well as lower productivity and flexibility, are factors in the decision-making process, the source said.
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A final decision has not yet been made, with BYD also considering geopolitical factors. The company is reportedly adhering to a directive from Beijing to avoid investing in countries that supported the EU’s tariffs on Chinese-made EVs. This has led to the exclusion of Italy and France from consideration, the source added.
The Christian Democratic Party, which is poised to play a key role in Germany’s next government, has pledged to support the country’s automotive sector while advocating for corporate tax cuts and attracting skilled labor. However, it opposes state subsidies, which the current coalition government has used to incentivize investment, such as a nearly 10 billion-euro ($10.8 billion) subsidy for an Intel site that has since faced delays.
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BYD’s Hungarian plant is expected to begin production in October, followed by the Turkish facility in March 2026. Once fully operational, both plants will have a combined annual capacity of 500,000 vehicles.
The company’s European expansion includes both EVs and hybrid vehicles. Industry estimates from S&P Global Mobility project BYD’s European sales to more than double in 2025 to 186,000 units, up from 83,000 in 2024, with further growth expected to nearly 400,000 units by 2029.